Year End Trust Distributions 2026

As we approach year-end, now is the time to review your trust distribution strategy and tax planning opportunities.

Key reminders for discretionary trusts:

• Trust distribution resolutions generally need to be completed by 30 June to create valid present entitlements.
• If income isn’t properly distributed, trustees could face tax at the highest marginal rate.
• Streaming of capital gains and franked dividends requires careful planning and documentation.
• The ATO continues to scrutinise Section 100A reimbursement arrangements, particularly where adult children are beneficiaries but don’t receive the distributed funds.
• Trusts with corporate beneficiaries should be aware of increased ATO attention around franking credit eligibility and the 45-day holding rule.

Have you reviewed your trust distributions and year-end tax planning yet?